Moto's 'Hail Mary'

Speed comes naturally to Sanjay Jha, even on the golf course. The head of Motorola Inc.'s cell phone division is known for a style of play called "Type A golf," which involves walking 18 holes, then being showered and at his desk in under four hours.

Speed comes naturally to Sanjay Jha, even on the golf course. The head of Motorola Inc.'s cell phone division is known for a style of play called "Type A golf," which involves walking 18 holes, then being showered and at his desk in under four hours.

"He's a force of nature," says Jeffrey Belk, a former head of strategy at Qualcomm Inc., Mr. Jha's previous employer. "He's not going to slow himself down for everyone else."

To save Schaumburg-based Motorola's handset business, Mr. Jha will need all the speed he can muster. Analysts estimate he has one year to roll out new handsets that will catch on with consumers and restore profits. If he doesn't, it likely will spell the end of Motorola as a phone maker.

"Christmas next year will be judgment day," says Jim Suva, a New York-based analyst for Citigroup Global Markets Inc.

That's because Mr. Jha, 45, has made an all-or-nothing bet to save the cell phone business, which has been losing money for two years.

Last quarter, he decided to scrap the new smartphones that Motorola had planned to roll out in early 2009. Believing those phones wouldn't sell enough to spark a turnaround and needing to cut development costs, he chose to focus all of the company's efforts on developing new handsets based on three software platforms  down from the six Motorola had relied on before  including Google Inc.'s anticipated but untested Android.

But those new handsets won't hit the market until next Christmas.

"They're going to burn money for five quarters and hope like hell that by Christmas of next year they'll have new products and they're going to be better than everyone else's products," says Sam Wilson, a San Francisco-based analyst with JMP Securities LLC. "It's a business strategy of Hail Mary: What happens if your products aren't successful?"

What probably happens is Motorola exits the cell phone business. By then the division will have posted three straight years of financial and marketshare losses. Already, with a lack of new offerings stretching back nearly two years, the company's marketshare has fallen to 8% worldwide from a high of 23% at year-end 2006, according to Connecticut-based researcher Gartner Inc. It could get worse.

Motorola already has put on hold its planned split into a cell phone company and another that will sell radio equipment, set-top boxes and wireless gear to industry. The spinoff originally was planned for fall 2009.

The company isn't willing to talk publicly about leaving the phone business, which it helped invent 25 years ago. But many others have given up on cell phones, including Ericsson, Siemens A.G., Philips Electronics N.V. and Qualcomm.

Mr. Jha himself has plenty riding on a turnaround. His employment contract says he'll own 3% of the phone business if it's spun off by Oct. 31, 2010. If it's not, he'll be paid $30 million. Last week, the company said Mr. Jha and co-CEO Greg Brown would take a 25% pay cut this year; Mr. Brown will forgo a bonus, while Mr. Jha's bonus will be reduced. Mr. Jha, who was to have been paid $3.6 million in salary and bonus, declined to be interviewed for this story.

He has moved as quickly up the corporate ladder as he does on the golf course. In 14 years at San Diego-based Qualcomm, he rose, at age 43, to chief operating officer, having led the charge to overtake Texas Instruments Corp. as the No. 1 supplier of wireless-phone chips.

At Motorola, insiders and observers say Mr. Jha is trying to instill a sense of urgency in a plodding corporate culture. When he arrived, he told senior managers to expect phone calls at midnight or later and staff meetings every other Saturday.

"Motorola needs a decisive guy to evolve the culture," says Andrew Lees, head of mobile communication for Microsoft Corp., whose Windows Mobile is one of the platforms Mr. Jha is keeping.

The last outside CEO at Motorola, Edward Zander, also made early progress in shaking things up. But in the end, the bureaucracy won: Motorola failed to produce hits after the Razr, and Mr. Zander resigned last year.

Unlike Mr. Zander and the two subsequent heads of Motorola's cell phone division, Mr. Brown and ex-IBM executive Stu Reed, Mr. Jha knows the phone business from the bottom up and packs a doctorate in electrical engineering. "I pity the engineer who tries to fool him," says Brian Modoff, a San Francisco-based analyst at Deutsche Bank.

"There's no ambiguity about who's in charge," says Dale Stone, a former Qualcomm executive who came to Motorola with Mr. Jha and now oversees product planning.

Mr. Jha told Crain's earlier this year that his biggest challenges are related to products, not people. He described a "sense of urgency to go change because there's clear recognition what got us here isn't what's going to get us out of here."